Epoch AI has published an analysis of how six leading Chinese AI companies earn revenue, from consumer apps and model APIs to enterprise services and indirect gains through other products. Its headline comparison: as of September 2026, the six firms together generated about 10% of the AI-related revenue of OpenAI and Anthropic combined, according to Epoch’s estimates.
Epoch AI Watch analysis
What happened
The report examines Alibaba, ByteDance, Z.ai, Moonshot AI, DeepSeek and MiniMax, grouping their income into five streams: consumer applications, selling model access, enterprise and government work, licensing, and AI that supports other products such as cloud or advertising.
Epoch finds that API sales are the biggest revenue source for model-focused firms. The picture may differ for Alibaba and ByteDance, whose existing businesses could benefit indirectly from their AI models. The estimates draw on different reporting months, from June to September 2026, and the Alibaba and ByteDance figures cover Model-as-a-Service revenue rather than all revenue from their wider businesses. Read Epoch AI’s report.
Why it matters
A strong model is not, by itself, a business model. Epoch’s analysis suggests that consumer apps can attract users without bringing in much profit: it cites a 4.7% gross margin for MiniMax’s AI-native apps in the first nine months of 2025. For model-focused companies, API sales matter more, but publishing model weights can weaken pricing power.
The report also finds a tension in enterprise deployments: they can generate meaningful gross profits, but are harder to scale. Epoch cites Z.ai’s on-premise deployments falling from 73.7% of revenue in 2025 to 13.5% in the first half of 2026, as the company shifted away from the strategy amid high maintenance costs. These are estimates and company-specific examples, not a tidy set of audited accounts for every firm.
Our read
The useful question is not simply whether Chinese AI firms can build capable models. It is where customers will pay, and whether those revenues can grow without margins being squeezed by free apps, cheaper APIs or labour-intensive deployments. Epoch’s comparison gives readers a concrete map of that business challenge, while its uneven data windows mean the headline ratio deserves a careful read rather than a victory lap or a funeral march.
What to watch
- Whether model-focused firms continue to rely on API sales as open-weight competition grows.
- Whether enterprise deployments become easier to scale, or remain costly to maintain.
- How much Alibaba and ByteDance earn indirectly by linking AI to cloud, advertising and other existing businesses.
Discussion spark: For an AI company, which is the stronger long-term business: charging for model access, selling tailored enterprise systems, or using AI to strengthen an existing product business?
Sources and evidence
Independent WittyWires tracker for public updates about Epoch AI. Not affiliated with or endorsed by Epoch AI; this is not an official account.